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Last Updated : Sep 12, 2019 08:12 PM IST | Source: Moneycontrol.com

How unconventional data management helps in digital banking

Lending companies are increasingly looking at emerging digital technologies to harness agile business implementation processes.

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At a recent industry event, Archana Jaganathan, Director for Decision Analytics at credit bureau, Experian India, spoke about how contemporary BFSI managers are using alternative data sources to enhance their decision-making processes.

While many see a tangible benefit in using this data to augment their performance, others are using it to reach prospective customers – some of whom they might have never imagined having as clients.

Here are her viewpoints based on data collated from Experian India’s internal resources.

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Digital banking started in India in the 1990s. A decade later, as this expanded to services, inherent security features were enhanced, which was followed by a spate of mergers and acquisitions.

In the period from 2010-15, as banking evolved, digital banking became a key strategy for most lending institutions.

This was evident in the resultant improved user experience with the introduction of mobile apps and PSU players launching digital banking systems.

Since then, the business has evolved with an increasing use of cutting-edge technologies like Artificial Intelligence(AI), Machine Learning(ML), chatbots, making digital banking a much smarter platform.

It is now believed that in the future digital banking will not be restricted to services alone. Instead, it is quite likely to move to recommendations using AI, data science and other emerging technologies.

This indicates that there is a shift towards more non-traditional data – be it SMS, transactional data, clickstreams or social media. There is a decreasing use of formal data sources to get information about consumers.

Instead, BFSI companies are progressively using advanced analytics, ML, algorithms, to gain better insight into the market and what their customers seek.

At a time when customers need instant gratification, this helps them keep pace with changing user expectations. Moreover, they can use these technologies to customise offerings as per their customer’s needs.

Starting as outreach mechanisms, these solutions now encompass customer acquisition, management and collection.

SHIFT TO SMART

BFSI companies are now seeking cloud-based solutions. Since it is not infrastructure intensive, it can be scaled as per their requirements.

Given that these are new business segments and data requirements, the need of the hour is quick thinking and agile business implementation.

For instance, earlier, taking decisions about offering credit products was a manual process involving filling up physical forms, doing RCU checks, collecting and verifying documents before the final disbursement.

Customer management involved looking at repayment history, was time-consuming.

The arrival of app-based application forms eased matters.  Customers merely had to fill in basic details and agencies like Experian would then conduct KYC, income and repayment verification as well as a fraud check before these applications are approved and disbursed.

By leveraging alternative data processes for investment management processes, asset managers are in a better position to understand multifaceted forces driving digital transformation.

They can also avail of the various strategic opportunities that exist, after evaluating strategic risks.

As financial companies get digitalised, data is ubiquitous and omniscient. When paired with new business models, it provides companies with opportunities to gain additional insight and value on what their customers seek.

While data is stored in hybrid environments and systems, they can reduce the complexity to create a single universe that can enhance visibility, improve efficiency and ensure better results.

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First Published on Sep 12, 2019 08:12 pm
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